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May 8, 2002 | 1520 IST
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Ernst to fall in step with Andersen

Savio G Pinto

Ernst & Young is planning to align its organisational structure with that of Andersen, the firm whose Indian operations it is taking over.

Ernst & Young India is now looking at structuring itself on the basis of its various practices. Andersen India followed this model, as did Ernst & Young before it changed the structure two years ago.

By the new arrangement, a professional in the organisation operating under a practice like taxation will report to the national taxation practice head. Earlier, he had to report to the zonal chief, Ernst & Young executives explained.

The move is aimed at sharpening the focus of practices and eliminating the superfluous layers of administration.

Kashi N Memani, chairman and managing partner of Ernst & Young India, said: "It is one of the options we are evaluating, but are yet to take a final decision. We may change according to whatever the business demands at different points of time."

Earlier, there was an apprehension that employees of Andersen would have to take pay cuts after the two firms combined. However, now it seems the salaries of the Ernst & Young employees will be hiked to bring them on a par with Andersen employees. However, Ernst & Young will factor in stringent targets and performance criteria.

Ernst & Young India had started talks with the clients of Andersen so that they remained with the firm after the acquisition, Memani said. "The initial feedback makes us feel confident about this," he added.

The Ernst & Young brass made a presentation to its employees on the consequences of the acquisition, on Monday.

The presentation was largely about the structures currently followed in the two organisations and the scope for integration. The strengths of the organisations and how the additional resources would be utilised were also discussed.

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